October marks Larry Kutscher's third anniversary as CEO of TravelClick, a New York consultancy that sells marketing and reservation services to independent and chain hotels worldwide.
Under Kutscher's leadership, revenue has risen by 35%. The company booked $257 million last year, according to the ratings agencies Moody's and Standard & Poor's.
Half of that revenue came from outside the US for the first time, said Kutscher in a phone interview with Tnooz.
Since 2010, Kutscher has more than doubled the company's staff to about 1,000 and has opened 11 sales offices worldwide.
Looking for a suitor?
TravelClick is backed by Genstar Capital, a private-equity firm, which acquired the company in December 2007 from Bain Capital, which kept a minority stake.
Genstar has been looking to sell the business for a while, says a source who spoke with Tnooz on a condition of anonymity.
Merger and acquisition discussions have gone hot and cold a couple of times, and TravelClick's financial sponsors have responded to feedback from those discussions by instructing Kutscher to adjust the company's business model, says the source.
Much obliged?
Genstar has ladled debt on the balance sheet of TravelClick, as is typical with private equity players who acquire businesses. Most notably, TravelClick received a $192 million loan.
In spring 2013, TravelClick received an additional $90 million loan, which was partly used to pay a dividend to the company's financial sponsors and partly to fund operations.
Now the combined "adjusted debt" is a hefty 6.5 times TravelClick's EBITA, or earnings before interest, taxes, depreciation and amortization.
The whopping debt has juiced revenue to a double-digit percentage annual rate. It also enabled acquisitions of Rubicon, a competitor, and channel managent specialist EZYield.
The world's local hotel ecommerce team
Kutscher's most prominent initiative has been to give TravelClick geographic ubiquity. Since 2011 the company has added offices in Dubai, Barcelona, Shanghai, Tokyo, Melbourne, Philadelphia, Chicago, Hong Kong, Orlando, Houston, and Singapore.
Outside of those offices, it has added dozens of employees who work out of their own homes as local representatives.
Kutscher told Tnooz: "Hotels are an inherently local business. We've dispersed our team to be in as many local markets as possible to give localized, relevant advice. That's a key to our business."
Kutscher's biggest emphasis has been on hiring more customer-facing employees. This year he brought the company's customer service department in-house. He has added an account management function to support the sales force. He has also grown the company's product development team.
He has created a hub-and-spoke model with a single operational headquarters for each respective region, such as Orlando for North America and Barcelona for Europe.
Kutscher has also made several adjustments to the company's executive suite, putting his own people in place. He hired Gary Michel, as CFO in February 2011. (Michel was one of his compatriots from his previous workplace, Register.com.)
He changed the company's management and added executive vice presidents and group heads, too.
TravelClick's changed ground game
TravelClick's core mission hasn't changed in the past few years. It still helps hotels drive traffic to their own websites with marketing and other services. The company serves 36,000 properties, a figure that counts hotels individually even if they're part of a chain such as Loews.
Since Kutchner took over, nearly all of TravelClick's products have been relaunched. Engineers have worked on its business intelligence software and its media offering to present the data in simpler and easier-to-analyze formats.
One of the coups in the past year was launching a booking engine, which the company says improved its conversion rates by enabling its customers to upsell to their customers more efficiently.
TravelClick's business intelligence solutions have the most number of customers of all of its products, but its other niche products deliver higher margins. So cross-selling and up-selling is vital to TravelClick's future growth.
Rebalancing the product mix
When Kutscher took over in 2010, few in the hospitality business were talking about metasearch, mobile booking, or social branding.
On metasearch, in particular, TravelClick has been investing heavily in its products. It's a partner of Google's Hotel Finder, meaning that TravelClick's hotel clients, when enrolled, can receive referals directly to their booking engines. Ditto, for TripAdvisor's new hotel metasearch tool.
TravelClick can also help hotels create mobile websites with booking engines and run "a full lifecycle of mobile marketing campaigns," says the CEO. It also has a "social branding solution", too.
Kutscher admits: "I can't say every product of ours is best in class, but most of our products are best in class, and we're working on investing in fixing the laggards."
On the marketing side, some competitors, such as HeBS Digital, have won notably more industry awards for their hotel marketing products than TravelClick has.
CORRECTION Sept. 26:
Actually TravelClick has won more awards: In 2012, TravelClick won a total of 63 Awards (15 W3, 20, 22 IMAs and 6 Adrians), HeBs won a total of 31 (4 IAC, 2AMA, 2Mobile Web, 1 Magellan, 6 WebAwards, 6 W3, 5 Adrian and % davey)
So far in 2013, TravelClick has won a total of 46 awards (20 WebAwards, 3 Magellan, 23 interactive), HeBS has won a total of 15 (6 WebAwards, 4 IAC, 5 Magellan). This does not include W3 awards as they were just released today (TravelClick won 14).
(I regret the error.)
Competitive set
Kutscher argues TravelClick is the only full-service provider for hotels at the level of individual properties and at the level of international chain headquarters.
Many competitors go after TravelClick on individual products and verticals, whether it is on demand generation, search engine optimization, reservation capabilities, or channel management. But perhaps only Sabre Hospitality Solutions -- which does business with TravelClick -- has as a product suite that's nearly as broad and overlapping.
What accomplishment is Kutscher proudest of in his three years?
"I'd say it's our team, especially with the people we've brought in to our sales, customer services, and product development teams."
"I'd also say that getting information we're hearing from our front-line salespeople filtered back to our product development teams is a challenge, and it's one we're now excelling at now."
"A big part of my emphasis is on maintaining our values and company culture as we scale up in size. We want the customers to feel that we have the right attitude."